FRANKFURT, March 5 (Reuters) – A long war in Iran would push up inflation in the euro zone and hurt growth but it is still too early to draw any conclusion about the conflict, European Central Bank policymaker Joachim Nagel said on Thursday.
“If the conflict comes to a swift end…the consequences for inflation would be short-term and limited overall,” he said in a speech.
“By contrast, if energy prices were to remain elevated for an extended period of time, this would tend to lead to higher inflation and weaker economic activity in the euro area.”
He added it was still too early to draw conclusions for the setting of interesting rates.
Nagel, the Bundesbank’s president, was presenting the German central bank’s annual report for 2025, which showed an 8.6 billion loss as a result of bonds bought during the stimulus programmes of the last decade.
While the losses were becoming smaller, Nagel expected the Bundesbank to close 2026 still in the red.
The annual accounts also showed the Bundesbank had not moved its 3,350 tonnes of gold, which remain stored in Frankfurt, New York and London.
(Reporting by Francesco Canepa; Editing by Toby Chopra)
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